At this morning’s Berkshire Hathaway annual meeting, Warren Buffett said the following in response to a question about tax credit policy (paraphrasing):
The government has made it a policy to shift the country toward renewable energy generation. Because the free market cannot support that shift on its own, tax credits are critical to support the necessary investment. Perhaps the free market will be able to support it sometime in the future.
This highlights precisely what I have harped on in recent posts with regard to the primary role of the federal government. That is, the federal government is in place to fund goods and services that do not meet the free market’s return on investment hurdle rate.
Likely the best example of this dynamic is the non-group healthcare insurance market. As demonstrated by the number of uninsured citizens pre-ACA, the free market cannot generate an appropriate ROI in this area. As such, in my opinion it is intelligent public policy to consolidate the cost of caring for the uninsured on the federal government balance sheet via Medicaid expansion.
In current form, the AHCA House bill goes a long way toward restoring free market structure to the entire healthcare insurance market. Where it fails is on the funding side. But the Senate Moderates should prove very helpful in dampening, if not entirely reversing, the inevitable side effects of a bill constructed by Freedom Caucus idiots.